Company Profile
Founded
Sezzle (ticker: SEZL) is a financial technology company founded by Charlie Youakim in 2016.
Services provided
Sezzle’s initial product is a next-business-day ACH payment and cash-back rewards system. Sezzle then iterated its buy now, pay later (BNPL) model in 2017, and Sezzle launched its product in the United States in August 2017.
Public market
Initial Public Offering
Sezzle listed on the ASX on July 30, 2019 at $1.22 per share, raising $30 million.
Unwinding the acquisition by Zip
In February 2022, Sezzle entered into a binding agreement to be acquired by Zip Australia by way of statutory merger, meaning that Sezzle was valued at A$491 million at the time of the announcement.
In July 2022, Sezzle and Zip mutually agreed to terminate the previously announced merger agreement for Zip’s proposed acquisition of Sezzle. As part of the parties’ termination agreement, Sezzle will receive $11 million from Zip to cover, among other things, Sezzle’s legal, accounting and other transaction-related expenses.
Listed on the US stock market
After Sezzle and Zip split, Sezzle began trading on the Nasdaq Stock Exchange on August 17, 2023, with the stock trading ticker SEZL.
Company business
What is buy now, pay later?
Sezzle currently specialises in buy now, pay later (BNPL) transactions, which are short-term instalment payments. Unlike other payment software, but without paying interest. The BNPL business opportunity is booming because most BNPL operators do not charge interest and handling fees from consumers, but instead charge a commission from merchants, attracting many people who are short of money to prepay for consumption, driving the unprecedented popularity of BNPL.
For a detailed introduction to buy now, pay later (BNPL), please see my post of: “The most popular news credit method BNPL“
Sezzle’s operating performance
Sezzle has currently acquired a large number of customers and reported good financial growth indicators – in the third quarter of 2024, Sezzle achieved a sales growth of 40.6% and a net income of US$15.4 million.
Not surprisingly, Sezzle’s rise came just before revenue growth began to accelerate in the first quarter, from 36% to 60% to 71%.
Dispute
On December 18, 2024, Hindenburg Research accused the company of lending at high interest rates to high-risk people and causing severe customer loss, causing Sezzle’s stock price to plummet by more than 23% in one day and triggering a trading halt due to excessive volatility. Temporary margin trading.
According to Hindenburg, Sezzle provided excessive credit lines to high-risk groups, especially those with poor credit who could not apply for credit cards. After obtaining low-interest funds from banks, it charged an interest rate of up to 12.65% for lending, resulting in extremely high risk of bad debts. In fact, the business situation is quite fragile. In addition, Hindenburg pointed out in the report that Sezzle is also facing a serious problem of customer churn, with fewer and fewer users and partner merchants of its BNPL services, and the company’s prospects are worrying.
Sezzle strongly refuted Hindenburg’s accusations, saying that the above statement was taken out of context and misleading, and also stressed that it was confident of achieving the financial forecast targets set by the company.
Competitors
Main competitors
Sezzle’s main competitors, whose main business is buy now, pay later (BNPL) companies, include listed Affirm, Block’s Afterpay, and Sweden’s Klarna.
Sezzle, in particular, is in very strong competition with Affirm. Sezzle tops the list of top performing U.S. stocks for 2024. The “buy now, pay later” company is in fierce competition with Affirm, but after a sharp rise in the second half of 2024, Affirm’s stock price is currently down less than 10% from its 52-week high, but it failed to enter the top 100.
Second tier competitors
Companies whose main business is buy now, pay later (BNPL) include financial giants such as PayPal, Visa, and Wanshida, as well as major e-commerce companies; even Apple and Amazon also offer similar buy now, pay later (BNPL) services.
Capital market performance
Popular among mutual fund managers
Over the same time frame, the number of mutual funds that own the company also increased significantly, from just 11 funds at the end of 2023 to more than 100 funds at the end of the third quarter of 2024, according to IBD MarketSurge.
Market Cap
As of January 19, 2025, Sezzle’s market value is US$1.3 billion, which is only considered a small stock in the US stock market.
Price-to-Earnings Ratio
As of January 19, 2025, Sezzle’s price-to-earnings ratio is 23.94 times.
Stock price performance
As of December 26, 2024, Sezzle’s stock:
- It rose 1258% in 2024.
- Since the company went public, it has risen by 177.5%.
Related articles
- “How Sezzle makes money?“
- “You should know the company Square (rebraned to Block)“
- “Is Afterpay Worth Block (Square) $29 Billion M&A?“
- “The most popular news credit method BNPL“
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